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Steelmaker Acerinox expects weak need to persist into 4th quarter

Spanish steelmaker Acerinox posted a sharp drop in thirdquarter net revenue on Tuesday as a. outcome of a weak stainless steel market in Europe and North. America that it said will likely continue through the fourth. quarter.

Its shares fell 4.1% by 0844 GMT, making them amongst the. greatest losers in Spain's blue-chip IBEX 35 index.

Net profit dropped 32% to 48 million euros ($ 52 million). on profits down 16% to 1.31 billion euros. Earnings fell regardless of a. 21% increase in output as operations resumed at its steel mill in. Cadiz in southern Spain after a five-month strike.

The company said its core profit reduced by more than 21%. year-on-year in the quarter as need in its main markets. stayed weak and international unpredictabilities continue to trouble the. sector.

It anticipates core profit, omitting the impacts of the sale of. its Malaysian system Bahru Stainless, to be even lower in the. fourth quarter.

The weak point in the need for stainless-steel continues in. the 4th quarter, it stated in a declaration. The seasonality of. completion of the year and the geopolitical and macroeconomic. uncertainties do not enable us to be positive in the brief. term, although the level of inventories is still low.

Acerinox's weak point comes as Europe's main steel industry. group Eurofer points to global steel overcapacity, unfair trade,. low demand in producing industry and high energy rates as. the greatest issues the market deals with.

Regardless of hard market conditions for stainless-steel, CEO. Bernardo Velazquez said in a declaration its U.S. branch and the. high-performance alloys division had robust efficiencies.

J.P. Morgan analysts stated they see Acerinox's outlook as. challenging, highlighting a third-quarter miss out on to their core. profits (EBITDA) forecast, increased net debt and weak demand,. which they said are likely to cause considerable downgrades in. 2024 and 2025 earnings projections.

(source: Reuters)